EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1010493
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Rapid Spray applied for a TCO in respect of certain wood pellet barbeque cookers on 01 March 2010.
Instrument
TCO No 1010493 was made on 09 June 2010. It declares that those certain wood pellet barbeque cookers are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 1010493 is taken to have come into force on 01 March 2010.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901 was enacted to provide a comprehensive framework for customs and border control in Australia, facilitating trade and protecting the revenue and security of the nation. One of its mechanisms is the Tariff Concession Order (TCO) process, enabling the Chief Executive Officer of Customs to reduce or eliminate customs duty on specified goods under certain conditions. This legislative instrument aims to address the gap in providing tariff relief for imported goods where no suitable Australian-made alternatives exist, thereby encouraging trade and supporting industries that rely on imported components or finished products. Enacted by the Parliament of Australia, the policy objective behind the TCO process is to foster economic growth and competitiveness by ensuring that Australian businesses have access to necessary goods at reduced costs, thereby enabling them to remain viable and innovative in a global market.
Scope and Application
The Tariff Concession Instrument No. 1010493, issued under the Customs Act 1901, pertains to the application of tariff concessions on certain wood pellet barbeque cookers. This Act applies to any person or entity seeking a tariff concession order (TCO) for goods that are not produced in Australia in the ordinary course of business and that do not correspond to goods specified in section 269SJ of the Act, which includes those that are considered non-substitutable. The instrument's geographic and jurisdictional reach is national, as it is implemented under the Commonwealth's authority. The instrument specifies that the application for a TCO must meet core criteria, which includes the absence of substitutable goods produced in Australia, and once the CEO of Customs is satisfied, a TCO is made. The TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person, but it does provide a benefit to importers by allowing them to apply for a refund of duty on goods imported from the date the TCO is taken to have come into force. The Act allows for the extension and restriction of application through subordinate instruments, which further define terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods."
Key Provisions
The Customs Act 1901, through its Part XVA, outlines the framework for Tariff Concession Orders (TCOs), which are administered by the Chief Executive Officer of Customs (CEO) (sections 269C and 269F). A TCO application can be made by a person to the CEO for goods that are not specified in section 269SJ of the Act. If the CEO is satisfied that the application is valid and that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must make a written order that declares the goods subject to a specified item in Schedule 4 of the Customs Tariff Act 1995, which sets the duty rate for those goods (sections 269P(3) and 269C). For example, TCO No. 1010493, made on 09 June 2010, declared certain wood pellet barbeque cookers to be subject to item 50 of Schedule 4, resulting in a duty rate of free instead of the general rate of 5%.
The Act imposes specific obligations on the CEO in relation to TCOs. Once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe there are reasons why the TCO should not be made (subsection 269K(1)). Additionally, the CEO must determine whether the application meets the core criteria, which include ensuring that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). In the case of Rapid Spray's application, no submissions were received by the CEO, and the application was subsequently approved, leading to the issuance of TCO No. 1010493.
The Act also specifies that a TCO is deemed to have come into effect on the day the application was lodged, which in this case was 01 March 2010 (subsection 269S(1)). Importantly, a TCO does not affect the rights of any person (other than the Commonwealth) in a way that disadvantages them or imposes liabilities for actions taken before the registration date (section 269S(2)). Importers, however, stand to benefit from the TCO as they can apply for a refund of duty on goods imported since the effective date of the TCO (Regulations, paragraph 126(1)(r)). No new liabilities are imposed on any person as a result of the TCO.
In terms of consequences for non-compliance, the Act does not explicitly outline offences, penalties, or specific civil or criminal consequences for breach of the provisions related to TCOs. However, any misuse or fraudulent claims in relation to the TCOs could potentially lead to legal action under other relevant sections of the Customs Act or related legislation, which could result in fines or other penalties as determined by the court. The exact penalties would depend on the nature and severity of the breach.